Seller concessions and buyer bargains - What to ask for in the current real estate market.
It is currently a buyer's market for real estate in most of the United States and there are many ways a buyer could negotiate for a deal beyond getting a great price. Here are some of the concessions sellers are willing to make and some ideas for buyers at the negotiations table.
1. Closing costs - Lately I have seen many real estate listings in California that say the seller would pay for the closing costs or the seller would pay a set amount towards the closing costs. Closing costs could add up to thousands of dollars depending on the size and type of loan a buyer acquires. This means that if a seller pitches in then a buyer would not need as much money to procure a loan.
2. Tax assessments - Many transactions in troubled real estate markets are currently foreclosures. Some of these properties have back taxes and usually the buyer is supposed to deal with this, but it is possible to negotiate with the bank or seller and have them pay for the taxes before the sale completes.
3. Home owner association fees - Here in San Mateo county the typical home owner association fee for a townhouse or condo is $300 to $500 a month so getting the seller to pay for one year of the fees is a $3000 to $6000 perk. Many new developments in the Bay Area are paying the fees for a year in order to move units, but some builders have given out deals where three years of HOA dues were paid. It is also possible to ask for an individual seller to pay the fees for a set amount of time as part of the deal.
4. Repairs and upgrades - Instead of buying a fixer upper, it is possible to ask sellers to do certain repairs and upgrades before the deal is complete. In new developments it is now common to receive upgrades to appliances, flooring, and other custom features.
5. Miscellaneous goods - In an article by CNN a buyer was able to score $800 worth of heating oil in addition to a price discount, and some sellers are throwing in other incentives such as cars and vacations. Indeed, this home seller in San Mateo is throwing in a free vacation to Maui if you buy the incredibly expensive home. In this case, the vacation is really a marketing tool and not a real discount since the home is quite overpriced.
All of these things can be negotiated in any real estate transaction, but in the current market it is more likely for the seller to agree to terms that are more in favor of the buyer. So if you are buying a home now you should keep in mind that it never hurts to ask for a discount, and there are many ways to receive the discount you want. You should also be aware of the difference of a true seller concession and a marketing gimmick because getting a vacation worth $5000 on a home that is $300k overpriced is not a good deal at all. Finally, you should get whatever terms you settle on in writing and make sure that the sellers follow through.
What discounts or perks have you gotten in recent real estate transactions? Feel free to share!